Overview
Oman has embarked on a comprehensive fiscal policy reform programme designed to reduce dependence on hydrocarbon revenues and establish long-term budgetary sustainability. The Medium-Term Fiscal Plan, introduced as part of Vision 2040, provides a structured framework for revenue diversification, expenditure rationalisation, and debt management. These reforms represent one of the most significant structural adjustments in the Sultanate’s modern economic history and are closely watched by international credit agencies and investors alike.
Key Points
The government has introduced value-added tax at five percent, implemented a corporate income tax regime, and restructured subsidies on fuel and utilities. Spending controls now target efficiency gains across ministries, with performance-based budgeting replacing incremental allocation. A new debt management office coordinates sovereign borrowing, and the establishment of the Oman Future Fund channels surplus revenues into long-term investment vehicles. Non-oil revenue is targeted to reach thirty percent of total government income by 2030.
Current Status
Oman achieved a fiscal surplus in 2022 for the first time in nearly a decade, followed by consecutive surpluses in 2023 and 2024. Public debt as a share of GDP has declined from its peak, and credit rating agencies have upgraded the Sultanate’s outlook to positive. The government continues to refine the medium-term fiscal balance target while balancing social spending commitments with consolidation objectives.
Vision 2040 Context
Under Vision 2040, fiscal sustainability is a foundational pillar. The strategy envisions a government that funds essential services without relying on volatile oil prices. Diversified revenue streams, efficient public expenditure, and prudent debt management form the triad of fiscal resilience that underpins every other national development objective. Achieving these targets will ensure Oman can invest in human capital, infrastructure, and innovation for generations to come.